HSBC has revealed a 28 per cent fall in first-half profits as the impact of US bad debts and credit crunch losses continued to weigh on the banking giant.
The company's pre-tax profits of £5.2 billion (€6.6 billion) came as it wrote off a total of £5.3bn on its struggling US business and investments hit by the credit turmoil.
Chairman Stephen Green said the first half of 2008 saw "the most difficult financial markets for several decades". He added: "HSBC was not immune from the turmoil."
HSBC said it faced "real uncertainties and difficulties" in the near term, but the figures were broadly in line with City hopes.
It also stressed the strength of its balance sheet - in contrast with the fund-raising needed this year by rivals such as Barclays, Royal Bank of Scotland and Halifax Bank of Scotland.
HSBC has a broad geographical spread and a major presence in fast-growing emerging markets such as Asia and Latin America. It remained profitable in all regions except North America in the first half of this year.
In the UK, the company said it had doubled its share of the new mortgage market from 3 per cent to 6 per cent after the launch of a product that offers to match the previous interest rates of homeowners facing a big bill to remortgage their properties. This share peaked at 12 per cent in May.
HSBC's commercial banking business meanwhile lifted pre-tax profits 23 per cent in the UK, and said arrears rates were "broadly unchanged" despite growing lending by 13 per cent.